Fannie Mae-No Politics (FNMA)

[Guido2]

Good morning Nats.

We are on the same side but differ on the actual issues and solutions.

Issues:

Senior Preferred Shares
I don't say the concept is illegal. What is illegal is dividends paid to SPS during conservatorship. If it is indeed SPS and not a loan, then the entire $300 billion plus paid to the Treasury should be returned. If it is a loan as the government sometimes argues, it's been overpaid and the overpayments should be refunded.

Liquidation Preference
The purpose is to ensure certain parties get first preference in case of liquidation. Having earned over $300 billion, after taxes, the last 8 years, liquidation is not an issue.

Warrants
Warrants executable at 10,000 shares for a dollar is illegal when the closing price the day before they were granted was over 70,000 times more than that.

Conservator
A conservator's primary duty is to preserve and conserve the assets of his wards. It is clear, that FHFA did not act in the best interests of Fannie Mae and Freddie Mac in signing the agreements with the Treasury.

Solutions:
The just solution is to reverse all actions taken by FHFA. of course, this is not possible. So I suggest:

Refund the $124 billion mentioned by Judge Sweeney as the overpayment.
Cancel the warrants.
Cancel the Senior Preferred Shares.
Cancel the Liquidation Preference.

I know the naysayers are going to say the government won't accept these conditions. But, the government acted in bad faith from the very beginning. It's either this, or Patswil's damages get added, plus the shenanigans are exposed in court.